Interim Results

Brunner Investment Trust PLC 27 July 2000 THE BRUNNER INVESTMENT TRUST PLC ANNOUNCEMENT OF INTERIM RESULTS For the year ended 31st May 2000 Net Asset Value A summary of the results for the six months ended 31st May 2000 is set out below. The Net Asset Value attributable to each Ordinary Share at 31st May 2000 was 578.0p. This compares with 560.7p at 30th November 1999 and represents an increase of 3.1% compared to an increase in the benchmark index (60% FTSE All-Share Index, -2.2%, and 40% FT/S&P World Index in sterling, +8.2%,) of +1.8%. Earnings Earnings in the six months to 31st May 2000 of 4.05p per Ordinary Share (calculated on a weighted average number of shares) have fallen by 4.7% compared with the same period last year. Interim Dividend The Board has declared an interim dividend of 3.10p net per Ordinary Share payable on 8th September 2000 to holders on the Register of Members at the close of business on 11th August 2000, maintaining the interim dividend declared last year. Forecast Final Dividend In my statement accompanying the Annual Report and Accounts I mentioned that the absence of dividend payments from newer growth companies and the tendency of older established companies to lower the proportion of their earnings paid out as dividends were together forcing the Board to review the objective of the Trust, particularly that relating to increasing the dividend by more than the rate of inflation over the long term. The Board believes that it would be in the interests of shareholders to replace the twin objectives of increasing each of capital and income at rates superior to their respective benchmarks, with one objective to achieve a total return higher than that of the benchmark index of 60% FTSE All Share and 40% FT/S&P World Index (ex UK, sterling adjusted) over the long term. This change would allow the Managers additional investment flexibility and should lead to a superior total return. However, it is the intention of the Board, in future, to pay a dividend each year at least at the level paid in the previous year. Accordingly, for the current year it would be the Board's intention to pay a final dividend of 3.80p per share making a total of 6.90p per share, the same as last year. Investment Review In the half-year to the end of May 2000 rising interest rates have been seen in both Europe and the United States as Central Banks have sought to dampen demand growth in order to avoid the resurgence of inflation. This policy has proved successful to date but it is still too early to say that rates have reached their peak. Currency markets have remained volatile with the euro falling sharply against all developed currencies before staging a recovery recently. Rising interest rates have led to profit taking in world equity markets particularly in Japan and the UK. During the first part of the period under review there were significant increases in the market valuation of the telecommunications, media and technology sectors. In the second quarter, however, these strong increases were reversed as more emphasis was placed on the earnings prospects of companies and as the supply of stock was increased with new companies coming to the market. Recently there has been evidence of greater selectivity by investors and the better quality stocks have shown good recoveries. During the early part of the period the Managers switched a meaningful proportion of the Trust's assets from technology into more defensive sectors but are now reversing that move on a selective basis, particularly concentrating on telecommunication hardware companies that will build the infrastructure and support the digital economy. Overall despite the volatility of the last few months the Managers and the Board believe that a significant position should be retained in the growth segments of the World's equity markets. J F H Trott Chairman Enquiries: For further information please contact: Simon White Dresdner RCM Global Investors Tel: 020 7475 2700 Amy Fisher Lansons Communications Tel: 020 7490 8828 SUMMARY OF UNAUDITED RESULTS STATEMENT OF TOTAL RETURN for the six months ended 31st May 2000 2000 -------------------------------------- (£'000) (£'000) (£'000) Revenue Capital Total Net gains on investments - 11,754 11,754 Income from fixed asset investments 3,393 - 3,393 Other income 275 - 275 Investment management fee (257) (599) (856) Expenses of administration (101) - (101) -------------------------------------- Net return before finance costs and taxation 3,310 11,155 14,465 Finance costs of borrowings (678) (1,580) (2,258) -------------------------------------- Return on ordinary activities before taxation 2,632 9,575 12,207 -------------------------------------- Overseas Taxation (43) - (43) UK Taxation (122) 122 - -------------------------------------- (165) 122 (43) -------------------------------------- Return after taxation 2,467 9,697 12,164 Dividends on Preference Stock (11) - (11) -------------------------------------- Return attributable to Ordinary Shareholders 2,456 9,697 12,153 Dividends on Ordinary Shares (see below) (1,880) - (1,880) -------------------------------------- Transfer to Reserves 576 9,697 10,273 -------------------------------------- Return per Ordinary Share 4.05p 15.98p 20.03p The revenue column of this statement is the profit and loss of the Company. Dividends on Ordinary Shares: 2000 (£'000) Interim 3.10p (1999 - 3.10p) 1,880 ----------- NET ASSET STATEMENT at 31st May 2000 2000 (£'000) Fixed asset investments 384,592 Net current assets 18,509 ----------- Total assets 403,101 ----------- Long term borrowings (52,046) Preference share capital (450) ----------- (52,496) ----------- Net assets attributable to Ordinary Shareholders 350,605 ----------- Net asset value per Ordinary Share 578.0p The net asset value is based on 60,660,000 Ordinary Shares in issue. STATEMENT OF TOTAL RETURN for the six months ended 31st May 1999 1999 -------------------------------------- (£'000) (£'000) (£'000) Revenue Capital Total Net gains on investments - 37,289 37,289 Income from fixed asset investments * 3,686 - * 3,686 Other income 206 - 206 Investment management fee (207) (484) (691) Expenses of administration (69) - (69) -------------------------------------- Net return before finance costs and taxation 3,616 36,805 40,421 Finance costs of borrowings (686) (1,587) (2,273) -------------------------------------- Return on ordinary activities before taxation 2,930 35,218 38,148 Overseas Taxation * (66) - * (66) UK Taxation (130) 157 27 -------------------------------------- (196) 157 (39) -------------------------------------- Return after taxation 2,734 35,375 38,109 Dividends on Preference Stock (11) - (11) -------------------------------------- Return attributable to Ordinary Shareholders 2,723 35,375 38,098 Dividends on Ordinary Shares (see below) (1,984) - (1,984) -------------------------------------- Transfer to Reserves 739 35,375 36,114 -------------------------------------- Return per Ordinary Share 4.25p 55.27p 59.52p The revenue column of this statement is the profit and loss of the Company. Dividends on Ordinary Shares: 1999 (£'000) Interim 3.10p (1998 - 3.00p) 1,984 ------- NET ASSET STATEMENT at 31st May 1999 1999 (£'000) Fixed asset investments 326,596 Net current assets 13,932 ------- Total assets 340,528 ------- Long term borrowings (52,107) Preference share capital (450) ------- (52,557) ------- Net assets attributable to Ordinary Shareholders 287,971 ------- Net asset value per Ordinary Share 450.0p The net asset value is based on 64,000,000 Ordinary Shares in issue. * Restated to be consistent with Financial Reporting Standard 16' Current Taxation'. STATEMENT OF TOTAL RETURN for the year ended 30th November 1999 1999 -------------------------------------- (£'000) (£'000) (£'000) Revenue Capital Total Net gains on investments - 106,157 106,157 Income from fixed asset investments * 6,060 - * 6,060 Other income 605 - 605 Investment management fee (433) (1,010) (1,443) Expenses of administration (126) - (126) -------------------------------------- Net return before finance costs and taxation 6,106 105,147 111,253 Finance costs of borrowings (1,309) (3,026) (4,335) -------------------------------------- Return on ordinary activities before taxation 4,797 102,121 106,918 Overseas Taxation * (107) - * (107) UK Taxation (272) 299 27 -------------------------------------- (379) 299 (80) -------------------------------------- Return after taxation 4,418 102,420 106,838 Dividends on Preference Stock (23) - (23) -------------------------------------- Return attributable to Ordinary Shareholders 4,395 102,420 106,815 Dividends on Ordinary Shares (see below) (4,292) - (4,292) -------------------------------------- Transfer to reserves 103 102,420 102,523 -------------------------------------- Return per Ordinary Share 6.91p 160.96p 167.87p The revenue column of this statement is the profit and loss account of the Company. Dividends on Ordinary Share: 1999 (£'000) Interim Ordinary 3.10p 1,976 Final Ordinary 3.80p 2,316 ----- ----- 6.90p 4,292 ----- NET ASSET STATEMENT as at 30th November 1999 1999 (£'000) Fixed asset investments 378,068 Net current assets 16,157 ------- Total assets 394,225 ------- Long term borrowings (52,077) Preference share capital (450) ------- (52,527) ------- Net assets attributable to Ordinary Shareholders 341,698 ------- Net asset value per Ordinary Share 560.7p The net asset value is based on 60,944,500 Ordinary Shares in issue. * Restated to be consistent with Financial Reporting Standard 16' Current Taxation'. Cash Flow Statement Six Months Six Months Year to to May 2000 to May 1999 November 1999 ------------------------------------------------ (£'000) (£'000) (£'000) Net cash inflow from operating activities 2,191 2,285 5,221 ------------------------------------------------ Servicing of Finance Interest paid (2,287) (2,117) (4,229) Dividends paid on preference stock (11) (8) (19) ------------------------------------------------ Net cash outflow on servicing of finance (2,298) (2,125) (4,248) ------------------------------------------------ Taxation ACT paid - (10) (10) Taxation credits repaid - 87 87 UK income tax repaid - 26 28 ------------------------------------------------ Net tax repaid - 103 105 ------------------------------------------------ Financial Investment Purchase of fixed asset investments (174,002) (286,391) (390,035) Sale of investments 173,025 265,551 398,670 ------------------------------------------------ Net cash (outflow) inflow from financial activities (977) (20,840) 8,635 Equity dividends paid (2,305) (2,368) (4,345) ------------------------------------------------ Net cash (outflow) inflow before financing (3,389) (22,945) 5,368 ------------------------------------------------ Financing Purchase of Ordinary Shares for cancellation (1,352) - (12,610) Expenses associated with share buy back (25) - (71) Increase (decrease) in short term loan 1,037 (203) (438) ------------------------------------------------ Net cash outflow from financing (340) (203) (13,119) ------------------------------------------------ Decrease in cash (3,729) (23,148) (7,751) ------------------------------------------------ This interim statement has been neither audited nor reviewed by the Company's auditors. The interim statement has been prepared using the same accounting policies as those adopted in the annual accounts for the year ended 30th November 1999. The Accounting Standards Board has recently recommended that the basis of accounting for 'avoir fiscal receipts' on French dividends be changed to be consistent with Financial Reporting Standard 16 'Current Taxation'. Thus, avoir fiscal receipts previously disclosed as income are now offset against the revenue tax charge. Prior periods have been restated accordingly. The non-statutory accounts for the year to 30th November 1999 are an extract from the latest published accounts of the Company which have been delivered to the Registrar of Companies. The auditors' opinion on those accounts was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The Returns per Ordinary Share are based on revenue or capital return to Ordinary Shareholders, as appropriate, and on 60,684,984 Ordinary Shares (May 1999 - 64,000,000 Shares; November 1999 - 63,631,492 Shares) being the weighted average number of shares in issue throughout the period. The Interim Report will be sent to Shareholders shortly and made available to the public at the Registered Office of the Company, 10 Fenchurch Street, London, EC3M 3LB. THE BRUNNER INVESTMENT TRUST PLC Twenty Largest Equity Holdings as at 31st May 2000 Market Value % of Principal Value Total Activities (£'000) Assets * Vodafone Airtouch 24,485 6.07 Telecommunications BP Amoco 13,922 3.45 Integrated Oil and Gas British Telecom 12,602 3.12 Telecommunications Shell Transport & Trading 9,094 2.25 Integrated Oil and Gas Glaxo Wellcome 8,107 2.01 Pharmaceuticals Lloyds TSB 7,782 1.93 Banking and Financial Services HSBC 7,197 1.78 Banking and Financial Services Marconi 7,004 1.73 Telecom Equipment Cable and Wireless 6,690 1.66 Telecommunications AstraZeneca 6,059 1.50 Pharmaceuticals United Utilities 5,995 1.49 Utilities Nokia (AB) 5,724 1.42 Telecommunications Scottish Power UK 5,300 1.31 Utilities Hanson 4,745 1.18 Conglomerate Prudential 4,736 1.17 Insurance Dresdner RCM Emerging Markets Trust PLC 4,563 1.13 Investment Trust Smithkline Beecham 4,526 1.12 Pharmaceuticals General Electric Co America 4,220 1.05 Industrial Holding Company Turbo Genset 4,200 1.04 Industrial Manufacturing Skyepharma 4,185 1.04 Manufacturing of Pharmaceuticals ------- ------ 151,136 37.45 ------- ------ * Total Assets include current liabilities Portfolio Analysis as at 31st May 2000 % United Kingdom 61.4 North America 18.8 Europe 10.4 Japan 4.4 Pacific Basin 3.5 Latin America 1.5 ----- 100.0 -----

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